Aspen City Council decided to reduce its 2013 grants to health and human services providers by $90,000 in a work session on Tuesday, frustrating many of the nonprofits’ representatives in attendance.

Members of the network, collectively known as the POD, received $390,000 from the city’s general fund for 2012. For 2013, that will be dropped to $300,000 in an effort to phase out health and human services grants given from the city’s general fund.

About a dozen POD members attended the work session lobbying council not to reduce the funding.

Michael Connolly, executive director at Valley Partnership, represented the group of nonprofits and said that the reduction in funds was a surprise to the nonprofits.

“From my own understanding as an executive director ... we didn’t know there were any changes on the horizon or potential changes on the horizon until last month,” he said.

Most of the organizations already have their 2013 budgets finalized based on the projection that the city would be giving $390,000 to the POD, he said.

“We don’t have a lot of wiggle room in terms of budget,” Connolly said.

Connolly suggested that if the city wants to lower funding, the cuts should not be done hastily and members of the POD should participate in those discussions. City and county grants also improve the chances that the nonprofits will receive outside funding from other organizations, because it proves that the groups have the support of local government, Connolly said.

City Manager Steve Barwick argued that council has warned the network that city funding is going to be reduced and eventually cut off altogether in budget discussions over the past four years.

In general, other municipalities don’t make the same amount of contributions to the nonprofits, Barwick said. The city has spent more than $350,000 on health and human service grants each year since 2007. It is paying nine times as much per capita as the town of Snowmass Village, Barwick said. The city ultimately can’t continue to contribute that much, he said.

“It’s simply not sustainable for the city,” Barwick said. “If we stay at this level we are looking at another round of layoffs and cutbacks [for the city].”

The current system is unreliable because there is a lot of volatility in the city’s general fund, Barwick said. What is needed is a fair and consistent tax budget, he said. Barwick noted that the city also told Pitkin County commissioners on July 5 last year that council was going to cut back its funds to the health and human services providers.

Mayor Mick Ireland argued that the current funding mechanism is flawed, because it double taxes residents who live in the city and pay both city and county taxes.

The county pays for grants through the Healthy Community Fund, which was created by a county property tax that is dedicated to financing health and human services and nonprofits in the valley. The city doesn’t have a tax dedicated for funding such programs and makes grants by taking money out of the municipal government’s general fund.

City residents, who make up 38 percent of the county’s population, pay about $137 per capita in taxes to fund health and human services, while county residents pay about $92, according to Ireland.

“We’re paying more,” Ireland said. “Whether we should pay more is worth discussing ... but it is disparate.”

County Commissioner Rachel Richards, who was in attendance, said that it is not the responsibility of commissioners to communicate the city’s budget cuts to the parties involved.

“We are not your conduit for saying that we are no longer interested in funding your project,” Richards said.

Richards said that city officials should have sent a letter informing the POD that cuts were going to be made. Richards also warned council not to rely on a future voter-approved mill levy to replace the city’s current funds. There have been talks by other groups including the Aspen School District and the ambulance district to create a mill levy, so the city will likely face competition in getting a mill levy approved, Richards said.

By cutting its funds, council is unfairly picking on the nonprofits, while similar double taxation occurs in the affordable housing system, Richards said.

“Why are we picking on health and human services nonprofits saying this is where the double taxation ends?” Richards said. “... I think the problem is devolving partnerships.”

County Manager Jon Peacock, who also attended the work session, said that it is clear the nonprofits did not receive the message regarding the city’s cutting back funds. The city and county should come together in another meeting to discuss a potential solution, Peacock said.

“Right now we’re having pronouncements being made and we haven’t really found the vehicle [for this] to be discussed at a policy level,” Peacock said.

City Finance Director Don Taylor noted that collective donations between the city and county are still increasing this year from about $1.8 million in 2012 to $2.1 million in 2013. That’s because the county has given more money than it gave in 2012 to the groups, he said.